"A large explosion apparently caused by an explosive device placed inside a car rocked the district of Kfar Sousa," the watchdog said.
"Several members of the security forces were injured in the blast," Observatory director Rami Abdel Rahman told AFP, adding that it was unclear what the explosion had targeted and whether it had caused any fatalities.
The rebel brigade Liwa al-Sham claimed responsibility for the blast in a video uploaded to YouTube late yesterday.
They said a statement with the names of those targeted would be released later.
A second video uploaded several hours later by the rebel brigade showed the blast, filmed from across a highway at some distance from the explosion site.
The two-minute clip shows a large explosion that sends up a fireball and burning embers, and is followed by the sound of gunfire.
Plumes of smoke illuminated by nearby streetlights rise from the scene and waft across the highway, on which cars continue to drive along.
The district has been targeted before, including in a massive double bombing early on in the uprising against President Bashar al-Assad in December 2011.
Suicide bombers hit two security service bases in the neighbourhood, killing 44 people, in attacks the regime blamed on Al-Qaeda but the opposition accused the regime of carrying out.
Those attacks were the first against the regime's powerful security services in the heart of Damascus, but have been followed by many others, targeting both civilian and military areas.
More than 100,000 people have died since Syria's uprising began in March 2011, according to the Observatory, which relies on a network of activists, lawyers and doctors on the ground.
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